Will a Bank notify you if your offer on a Bank Owned Home has been rejected?

We're completely in love with a house we found a few months ago. It needs some work, which is why we felt a low ball offer was warranted. The listing price is $149,900, and our first offer was $128,000. Within a week, the bank countered our offer and said "bring your biggest and best offer". So, we immediately offered $135,000 and requested closing costs to be financed. We expressed why we felt it was a fair offer, considering how the home needs a lot of cosmetic work. However, we can see past all the work that will need to be done.

We made the second offer over a month ago, and have not heard a word from the bank. We've kept our eye on the listing, and today, it is now listed as "pending". What does that mean? Does it mean our offer was so offensive they didn't feel obligated to reply? What's the procedure once an offer is accepted? Will it be listed as "pending" even before the buyer has been notified of acceptance?

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Answers

Pending normally means that an offer has been accepted and the house is Under contract or has a signed sales agreement from both buyer and seller with ernest money collected. Did you have a real estate agent representing you? If so he/she could contact the bank or listing agent to see why you didn't receive a response.

Most banks do not relay information back to the buyer or buyers agent about offers that are not accepted. In many cases, REO properties get many offers and the bank works with the "highest & best" offers.

It is possible - that an offer for full price without contingencies was submitted. Typically, banks price their REO's at the final selling price, taking into consideration the condition of the property as well as other factors.

Just wanted to provide an interesting update on the house we made an offer on: The people who bid higher than we did are already moving into their new home, and it hasn't even closed yet. We're certainly not "stalking" the property; However, we just so happen to drive past it on a daily basis, as our friends live on that very street, and run the HOA.

How on earth could it be arranged for someone to move into a home that hasn't even closed yet? I can't help but wonder if the listing agent was also "representing" the buyer.

Thank you for your reply, Mott Kornicki. We were outbid by a few thousand dollars, and I'm very pleased to say that the listing agent of the property contacted my agent today to let him know our offer was rejected. I must say, it was very sweet of her to wait until after the holidays to let us know. High emotions are involved in this process (we're soon to be first time home owners), and it's wonderful to encounter professionals who consider the buyers when breaking that kind of news.

Now that we've had the day to think things over and view a few other homes, we realize that not getting that home was possibly a blessing in disguise, since it does need a lot of work.

I'd like to clarify for people viewing my question that there was no wrong-doing on my agent's part. Comparables were run, and in fact, our offer was very much in line with the market value of the property. Other houses in that subdivision have sold for around the same price as our offer within the past six months (and those houses were in excellent condition). Houses whose agents are ill advising them on current market conditions, have been listed for one year or longer with an asking price above $220,000. I wonder why those houses aren't selling?

I don't want to seem like a cheerleader for my client/agent/friend, but he knows his profession well, and because he knows it well, he's had a tremendous amount of national success and exposure for services he provides. I trust and value his opinions, guidance and experience in these matters. I appreciate the feedback, but don't appreciate the assumptions that my agent must have done something wrong.

The fact is, word came this morning that someone outbid us by a few thousand dollars. Their offer was accepted by the bank, who consequently, reduced their asking price by $30,000 over the past several months to keep up with current market conditions. Yes, we're disappointed that our offer was rejected, but the fact that we were outbid by a mere few thousand dollars speaks volumes about our offer not being that far off. Also, there were only two offers on the table for that property (a little gem that remained unnoticed for several months). Unfortunately, we lost our bid. However, things happen for a reason and the higher bidder proved just how much they loved that home. I'm quite sure they'll be very happy in it.

With the help of our agent, we are moving onto something better. A new offer has been drafted up on another property, and to be quite frank, we love it more than we loved the other one. After having seen it, we realize that the other home which is 17 years old and needs a lot of work, would have ended up being, not only a money pit, but a never-ending quest to fix it up.

Yes, indeed: Our lesson learned was that our agent knows what he's doing, we made an appropriate offer, and we lost fairly. Thank you for taking the time to reply.

Ha. Lesson Learned! Next time you make an offer on a bank owned property, have your Realtor do comparables. Most of the time bank owned properties are already under priced. So if the comparable to this house is $185K even if you offer the full $150K price and put in $30K of renovation you will still be under market value. And for $30K you can re-tile and re carpet the whole house, repaint the interior, change kitchen cabinets, put granite and do extensive upgrades to to all bathrooms and still have change to do the landscaping.

Most buyers make the mistake of looking at the $150K as needing $30K worth of work therefore will offer $120K.

Remember, if it's a good deal, there will be lots of offers. Banks will choose the best one on the table and throw away the rest.

Thank you, Lynn911. We had hoped (rather foolishly) that banks would have a little more respect for those who bailed them out. At least, enough respect to simply let someone know they should continue their search. I know a house rejection isn't personal, but I think this entire process could have and should have been handled differently by the listing agent.

Hi, Gene; The listing agent is not the broker; However, our agent did call the broker a week and a half ago to see if the listing agent was still working for the company, since no calls or e-mail has been returned. They assured him that the listing agent still worked for them, then proceeded to send the agent an e-mail with a carbon copy to my agent. Still, that did not get the listing agent to reply. My agent has said on several occasions that he has never dealt with a listing agent before who refused to reciprocate communications. Due to all of this, we're a little concerned that our second offer didn't make it to the broker at all. When we made our first offer, our agent was told that only one other offer was on the table. Since the bank countered and didn't reject, our agent thought our original offer might have been around the same range or slightly higher as/than the other party's offer. We've thought about throwing other offers out there on other properties, but from what we've been told, banks are taking considerably less time to respond to offers than what we've experienced with the property of main interest. So, we've held back from making other offers on houses that we like a lot less than the other, in case we had to make a decision between accepting something else before hearing back from the bank on the home we truly love. Yikes, the waiting game just got a new curve ball thrown with the "pending" status, and we're being as patient as we can be.

Thank you for your well-wishes. We certainly appreciate it, and hope luck will be on our side ;-)

Hi, Gene, Thank you for your answer. Our agent is a client of mine and friend who deals with loss mitigation, short sale negotiations, and REO homes, among other things. However, the listing agent of the house we made an offer on has been pretty much unreachable since the time we made our offer. I discuss business/projects with my client/friend/agent on a daily basis, and he mentioned yesterday that he'd try to get a hold of the listing agent again to find out what's happening with this property. Apparently, the listing agent of the property we're interested in doesn't get back to anyone regarding any property. Since it's Christmas, my agent suspects that he won't know one way or the other until after the holidays, especially since getting a hold of the listing agent when it's not a holiday is next to impossible. Nevertheless, we're hopeful. Even if it's not this home that we get, we'll continue our search. However, most of the properties available in our area are short sales, and we really don't want to go through that waiting process. Heck, just waiting for the bank to make a decision on this REO was heartbreaking enough. Either way, we really set ourselves up for disappointment by loving that house so much. I find it very hard to imagine that someone would offer the full asking price, since it needs so much work. But, who knows -- maybe someone loved it as much as we do, saw its potential, and made a higher offer. We have a lot of room to go higher, but they didn't counter our last offer. We have great financing, VA backing, impeccable credit. Darn, darn, darn! We loved that house! Thanks again. Happy Holidays.

Thank you for your reply, Sandra Lauer. Yes, we do have an agent, and maybe we're getting all worked up over nothing at this point. In fact, the house is still listed as "for sale" on major real estate websites, like Trulia, and it was our agent who said the listing had gone "pending" yesterday on his realtor only MLS information site. So, as far as we can tell, the fact that it's currently pending is not information yet made available to everyone. Our agent said "well, maybe it's your offer that's pending". Unfortunately, it's Christmas, so we likely won't find anything out until after the holidays.

We were warned not to fall in love with it in case someone else made a better offer, but we did anyway. We've been waiting, fingers crossed, to hear from the bank about our second offer, and each day that we didn't hear from them, we'd lose a little hope. We watched the asking price drop by $30,000 over the past few months, so we saw opportunity! We're just wondering if it's common or unheard of for a bank not to notify a buyer of a decision one way or the other. They were pretty darn fast countering our first offer. Thanks for your guidance. Happy Holidays!